1) A market basket is made up of three goods, 100X, 120Y, and 180Z. The prices in year one are $1.20, $2.10, and $3.25, respectively. The prices in year two are $1.44, $2.23, and $3.88. Assume year one to be the base year: The consumer price index in the base year is equal to________. The approximate consumer price index in year two is equal to__________.
(Make sure you show your calculation and round up to the nearest hundredth
2) Suppose there are five goods in the economy, A-E. The year one quantity of each is 10A, 20B, 30C, 40D, and 50E. year one prices are $1 for each unit of A, $2 for each unit of B, $3 for each unit of C, $4 for each unit of D, and $5 for each unit of E.The year two quantity of each is 9A, 18B, 27C, 36D, and 45E. year two prices are $2 for each unit of A, $3 for each unit of B, $4 for each unit of C, $5 for each unit of D, and $6 for each unit of E.Year number one is the Base-year.
Nominal GDP in year one equals _________ and in year two equals_________.
Real GDP in year one equals ____________ and in year two equals_________.
(Make sure you show your calculation and round up to the nearest hundredth)